As living costs rise, some Moroccan families receive just MAD 350 in social aid

Morocco’s direct social assistance program is failing to keep pace with rising living costs, with some households receiving as little as MAD 350 per month despite a legal minimum payment of MAD 500, according to a new report by the Moroccan Institute for Policy Analysis (MIPA).

The reduction occurs because health insurance contributions are deducted from beneficiaries’ monthly payments. After these deductions, the final amount can fall below the minimum guaranteed by the decree governing Morocco’s direct social support system.

MIPA argues that this practice contradicts the law, which stipulates that the monthly allowance paid to the head of a household must not fall below MAD 500 under any circumstances.

Although the government has steadily expanded the program since its launch at the end of 2023, the institute said the reform has yet to fulfill its original objective of universal social protection.

The initiative initially aimed to provide family benefits to approximately 7 million children. According to MIPA, around 5.5 million children are currently covered, while the remaining 1.5 million are considered by the government to belong to households that do not qualify for assistance.

Beyond questions of eligibility, the report argues that the value of the transfers is insufficient to meet the program’s goals. While regular cash payments help vulnerable families cover part of their basic expenses, MIPA said they do not provide the minimum income required to ensure a decent standard of living.

Economist Mohamed Jadri said the program has eased some financial pressure on low-income households, but rising prices continue to erode its impact.

He noted that repeated increases in the cost of essential goods have quickly offset gains from higher wages and government assistance, leaving many families struggling to meet everyday expenses.

Jadri said the challenge extends beyond the amount of financial aid, arguing that wages have failed to keep pace with inflation. In some cases, he said, a full day’s earnings are barely enough to purchase one kilogram of meat.

He also warned that the current system may create unintended incentives, with some workers reportedly moving into the informal economy to avoid losing eligibility for social assistance.

According to Jadri, cash transfers alone cannot address Morocco’s cost-of-living pressures. He called for stronger market oversight, greater resources for inspection authorities to combat speculation and excessive intermediary practices, and broader reforms aimed at stabilizing the prices of essential goods and services.

MIPA further noted that the program relies almost entirely on direct cash assistance without offering measures to help beneficiaries achieve long-term financial independence, such as employment support or income-generating initiatives.

The institute also highlighted concerns among beneficiaries who fear that even a slight improvement in their socioeconomic score could lead to the loss of their assistance, potentially disrupting household finances and spending decisions.

It also criticized the requirement for some eligible households to settle outstanding health insurance contributions and debts linked to the National Social Security Fund before receiving social assistance. MIPA argued that families qualifying for direct support should automatically benefit from public health coverage.

Finally, the report said the minimum monthly payment has not been adjusted to reflect the sharp rise in prices since it was established before 2021, resulting in a continued decline in beneficiaries’ purchasing power despite regular government transfers.